Economics Study Guide/FS-Chapter 4 Demand

Is the willingness to buy a good or service and the ability to pay for it

If quantity demanded changes significantly as price changes

If quantity demanded changes little as price changes

substitute goods
Are goods and services that can be used in place of each other

Are goods that are used together, so a rise in demand for one increases the demand for the other

Diminishing marginal utility
States that the marginal benefit of using each additional unit of a product during a given period will decline

Change in quantity demanded (due to price)
Is an increase or decrease in the amount demanded because of change in price

Change in demand (6 factors)
Occurs when something prompts consumers to buy different amounts at every price. 6factors-
Market Size
Consumer Tastes
Consumer Expectations
Substitute Goods
Complementary Goods

Demand curve
Graphically shows the data from a demand schedule

Normal goods
Are goods that consumers demand more of when their income rise

Inferior goods
Are goods that consumers demand less of when their income rises

Chart/graph interpretation

Movement along the demand curve and shifts to a new curve
Changes in demand